Singapore Property News This Week #194

Residential

Increase in January’s HDB resale prices unlikely to be sustained

According to the Singapore Real Estate Exchange, HDB resale prices in January had increased by 0.6 percent month-on-month. Resale prices of HDB units in mature estates increased by 0.5 percent and resale prices of HDB units in non-mature estates increased by 0.7 percent in January, from the previous month. Particularly, four and five-room flats saw a 1.1 percent and 1.5 percent increase in resale prices. Nonetheless, the resale transaction volume in January was lower than in December last year, when 1,295 units that were transacted. However, Eugene Lim from ERA Realty believes that this slight increase in resale prices will not be sustained. Ong Kah Seng from R’ST Research added that strong interest in the Pinnacle @ Duxton may have inflated resale prices this January. However, Lim predicts that HDB resale prices in the first half of the year will be muted. According to data from HDB, resale prices had fallen by a total of 6 percent last year. Not only so, resale prices this January are 5.7 percent lower year-on-year as compared to a year ago.

(Source: Business Times)

ERA predicts growth in auction market

ERA Realty predicts that there will be more auctioned properties to be sold this year as the market for it expands. Jack Chua from ERA Realty said that sales in the auction market were slow last year as sellers were not realistic in pricing their properties. Nonetheless, market experts believe that demand will increase when the gap between buyers’ expectation and sellers’ willingness to sell narrows. According to data from Colliers, 529 properties were auctioned in 2014. This was a significant increase from the 488 properties that were auctioned in 2013. Not only so, $36.9 million was made from mortgagee sales. This was more than twice the amount that was amassed from the $12.6 million sale in 2013.

(Source: Business Times)

16 units at Emerald Hill sold for $75 million

16 units located at 111 Emerald Hill have been sold by Savills to Blackstone. The 12-storey freehold development consists of 40 completed condo units, which have all been sold following the sale of the remaining 16 units. Since the development has a strata area of about 44,000 sq feet, the 16-unit sale is believed to be valued between $75 million and $76 million, or about $1,700 psf. Market experts believe that the low psf pricing could be a result of declined interest in luxury condos. Shaun Poh from Cushman & Wakefield added that such bulk purchases are rare. The 16 units that had changed hands include four penthouses, which have roof terraces. On the other hand, the other 24 units changed hands between November 2010 and January 2014. The Business Times added that the development had received its Temporary Occupation Permit in 2011.

(Source: Business Times)

Colliers: rising mortgage costs will not significantly impact servicing abilities

Due to higher interest rates, homebuyers may have to foot higher monthly mortgages. However, Grace Ng from Colliers International believes that increased mortgage costs are not expected to impact buyers’ ability to service monthly mortgages. This is because interest rates are still relatively low as compared to that in 2008, during the financial crisis. Not only so, while interest rates have been increasing, Ng said that as the US economy remains weak, global interest rates should remain relatively muted. Nonetheless, Song Seng Wun from CIMB expects interest rates to climb following policy changes made by the Monetary Authority of Singapore. Chua Yang Liang from JLL added that with slower economic growth and increasing interests rates, homeowners may be negatively affected as the residential market will be destabilised by the economic conditions. The weak leasing market may add on to homeowners’ burden as it may be more difficult for them to finance their mortgages, said market experts.

(Source: Business Times)

Effect of URA’s guideline remains unclear in curbing surge of shoebox units

According to a study by Knight Frank, the effect of URA’s current measures to moderate the development of shoebox apartments may be unclear. The study, which included a select number of private residential projects, saw an increase in the number of shoebox apartments outside of the central area since November 2012. This suggests that URA’s cap on the maximum number of dwelling units may not have been effective. Nonetheless, the share of shoebox units in the North and West regions fell following the implementation of URA’s guidelines. Alice Tan from Knight Frank believes that to stay competitive, developers will still build smaller units. This is especially so as there is weak property demand for properties.

(Source: Business Times)

Commercial

Tanjong Pagar Centre to be completed by mid-2016

Tanjong Pagar Centre is expected to be completed by mid-2016, according to GuocoLand. As such, GuocoLand will be increasing its marketing efforts for office and rental components of the mixed development. When the development is completed, it would be the tallest building with residential units located at the highest floors. GuocoLand believes that the 100,000 sq feet of net lettable retail space that has been allocated for F&B usage will attract crowds to the centre. Cheng Hsing Yao from GuocoLand intends to brand the centre as a “national food haven.” Not only so, it is believed that the 150,000 sq ft landscaped Urban Park will also be a crowd puller. According to the Business Times, about 70 percent of the retail space at the centre will be occupied by F&B outlets. Cheng said that the office spaces at Tanjong Pagar Centre have also garnered high interest. He added that potential tenants will have a lot of flexibility in configuring their offices as large column-free floor plates of 27,000 to 30,000 sq ft are available.

(Source: Business Times)